Suppose that the US long-term capital gain tax rate is 20% and short-term capita

Question

Suppose that the US long-term capital gain tax rate is 20% and short-term capital gain tax
rate is 28% (same as average personal income tax). You took a futures position with
opening value of $405,000 in August of 2012 and closed the position in February of 2013 at
$528,000. On December 31, 2012 your futures position was market to market at $491,503
only. What is your additional tax liability in 2012 due to this futures transaction (position)?

a. $21,452.70
b. $20,068.70
c. $17,400.00
d. $24,220.80

Explanation / Answer

Additional 28% due to December transaction + additional (28%-20%) for turning a long term into short term investment = 28%*(528000-491503) + 8%*(528000-405000) = $20059.16

Nearest answer is $20,068.70

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